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As an individual you can voluntarily declare yourself insolvent, or one or more of your credit providers can apply to have your estate sequestrated. Sequestration is most appropriate in situations where your debt is going to take over ten years to repay (excluding your immovable property).

Sequestration is not a decision to be taken lightly. All your assets will be sold to the highest bidder and it has very serious implications for your credit record. You will not be able to borrow any more funds and you will be listed at the credit bureaus for a period of 10 years. Bear in mind that you will be able to bring an Application for Rehabilitation five years after the date of sequestration. 


When a business is unable to repay its debt it will be placed into Liquidation. All the assets of the business will be sold by public auction. It t is an unfortunate fact that up to 80% of small and medium sized enterprises in South Africa will fail in the first 2 years of their existence.